Organizational decision making process of

identifying and solving problems

1. Problem Identification
2. Problem Solution
 Programmed Decisions
repetitive and well defined
Individuals naturally make programmed
decisions on a daily basis.
- a company may create a
standard routine for handling
technical issues, customer
service problems or disciplinary
matters.
(An employee’s duties may become routine with
repetition, like the process a mechanic uses to
troubleshoot problems with a customer’s car).
 Non programmed Decisions
novel and poorly defined.
- For which there are no proven
answers to use as a guide. In such a
case, a manager must make a decision
that is unique to the situation and
results in a tailored solution.
(visits a new restaurant, unfamiliar with the menu and the menu is in
a language she does not understand).
(In the business world, the makers of the earliest personal
computers had to make unprogrammed decisions regarding the type
of marketing to use to attract customers who possibly had never
 Individual Decision Making

 Rational approach
ideal method for how managers should
make decisions

 Bounded rationality
perspective
how decisions are made under severe time and
resource constraints
 Types of Organizational Decision Making

Management Incremental
Science Approach Decision Model

 Statistics to identify & measure

Carnegie Model Garbage Can Model variables
 quantitative data lacks tacit
knowledge
Happens when someone
continues to dedicate
resources, including time and assumes that losses and gains are valued
money, to a failing course of differently, and thus individuals make
action. decisions based on perceived gains
• Bidding wars
• Reviving a dying project instead of perceived losses.